The community budgets programme is to be extended with an extra £4.3m funding that will mean neighbourhood and community budget pilots are introduced in 100 new areas.

Communities minister, Don Foster, today announced that the programme would receive new financial support, not announced in the chancellor's spending review, from the Department of Communities and Local Government. This will build on work already done this year by the 12 community budget pilot areas.

A report released today highlights work done in these 12 areas, featuring London's volunteers, who are predicted to save the NHS £4m in five years by promoting healthy lifestyles and work done by police officers and the community in Balsall Heath, Birmingham, who are developing street patrols and different ways of policing to reduce anti-social behaviour.

Analysis shows that at a cost of £35,000 a year, over five years, work in Birmingham could produce savings of more than £500,000.

Foster said: "This investment will help build a popular movement towards of a new way of working. Handing control of local public services over to local communities who know their areas best can deliver more and better for less, help create more resilient and involved communities and build neighbourhoods that are better places to live."

The move has also been welcomed by the Local Government Association's chairman, Sir Merrick Cockell, who said: "Giving local areas more say in how public services are designed and delivered improves those services and saves money. This approach is already working in a number of areas across the country on issues as diverse as promoting healthy lifestyles and tackling antisocial behaviour. The expansion of the programme is welcome.

"Neighbourhood community budgets are an important part of the drive to take power out of Whitehall and place it in the hands of people and communities."

The expansion of the programme will also lead to a network of champions being set up to provide peer support and advice. The new investment sits alongside a further £350,000 support for existing pilots.

Alex Thomson, chief executive of Localis, said: "This is excellent news, as we've argued for a long time that joining up public services at the local level must be an integral part of all our futures.

"There is lots of positive stuff coming out of the pilots, but none of this is easy – it will take time, effort, and, most importantly, local leadership to make this work around the country. But I'm optimistic."

• What do you think? Email sarah.marsh@guardian.co.uk if you want to contribute an article to this debate.

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